Is an administrator of a company an "officer" of that company? The Supreme Court's answer in a recent employment judgment (with potentially broad application) was a resounding "no," which will undoubtedly reassure insolvency practitioners faced with potential criminal liability for carrying out duties conferred on an "officer" of the company.
When a company is on the brink of entering into insolvency proceedings the tax impact, understandably, may not be at the forefront of everyone’s mind and so may be overlooked. However, entry into liquidation or administration or the appointment of a receiver can have an adverse impact on, and sever, UK tax groups. This can result in (unexpected) tax leakage and further depletion of assets, adding greater pressure to the distressed situation.
Limiting Liability of Administrators for Employee Wages
Walley IMO PGP Group (Aust) Pty Ltd [2023] FCA 1554 ("PGP Group") and Crosbie IMO Godfreys Group Pty Ltd [2024] FCA 60 ("Godfreys")
Voluntary administrators have been able to seek orders releasing them from their personal liability for debts incurred by them in the course of conducting a company's business. That relief has been available where it has been necessary to support the continuing operation of that business.
HMRC has recently updated its published guidance on the effect of insolvency on existing VAT groups following appointment of an insolvency practitioner.
The updated guidance
The updated guidance provides that:
Lenders Beware: Security Vulnerable as an unreasonable director-related transaction
Cooper as Liquidator of Runtong Investment and Development Pty Limited) v CEG Director Securities Pty Limited [2024] FCA 6. ("CEG")
Introducción
Esta edición de las píldoras concursales, como ya es tradicional, incluye sentencias hechas públicas en los meses de diciembre y enero. Preferimos no enviarlas ahora en lugar de a finales de diciembre porque creemos este es mejor momento para su lectura.
In the first Part 26A appeal decision since the inception of the restructuring plan in 2020, the Court of Appeal has set aside the restructuring plan sanction order that was granted to German real estate group, Adler.
Fiduciary Duties of Receivers
Receivers appointed to enforce a security owe their fiduciary duties to their appointor and not to the mortgagor. So, when realising the assets of the mortgagor, the receivers can focus their attention on pursuing that course of action which, as they judge it, is best calculated to optimise the position of their appointor; Salmon v Albarran [2023] NSWSC 1238 ("Salmon").
Following the Government's response to the UNCITRAL consultation (see our briefing here) - which suggests that, for a while at least, the rule in Gibbs is here to stay - we expect to see an increase in parallel proceedings being used when multijurisdictional corporate groups seek to restructure their debt.
Introducción
En las píldoras concursales de este mes destacamos: